Federal Court of Australia

McNickle v Huntsman Chemical Company Australia Pty Ltd (Costs) [2024] FCA 883

ORDERS

UPON THE UNDERTAKINGS TO THE COURT OF:

A    MAURICE BLACKBURN PTY LIMITED THAT IN THE EVENT OF THE COURT MAKING AN ORDER REQUIRING MR MCNICKLE TO PAY SOME OR ALL OF ANY OF THE RESPONDENTS’ COSTS, MAURICE BLACKBURN WILL, ON BEHALF OF MR MCNICKLE, PAY TO THE RESPONDENTS AN AMOUNT EQUAL TO THE AGGREGATE COSTS AND DISBURSEMENTS, INCLUDING GST, THAT MR MCNICKLE IS REQUIRED TO PAY IN ACCORDANCE WITH THAT COSTS ORDER, ON THE DATE THAT MR MCNICKLE IS REQUIRED TO PAY SUCH COSTS AND DISBURSEMENTS; AND

B    THE RESPONDENTS, THROUGH ITS SENIOR COUNSEL, TO ENFORCE ONLY ANY ORDER FOR COSTS AGAINST THE APPLICANT TO THE EXTENT AND IN THE QUANTUM THAT HIS SOLICITORS HAVE, PURSUANT TO THE UNDERTAKING SET OUT ABOVE, INDEMNIFIED HIM AGAINST SUCH AN ORDER,

THE COURT ORDERS THAT:

1.    Subject to Orders 2 to 4 below, the applicant pay the respondents’ costs of the proceeding up to the date of delivery of judgment limited to the party/party costs of the respondents that would have been incurred in the event that instead of making the order for an initial trial (being Order 43) made on 28 September 2020 as varied on 12 October 2020 (Order 7), a form of initial trial had been ordered on 12 October 2020 that provided for an initial trial of the issues subsequently identified in Order 2 of the Orders of 26 April 2023 (Costs Order).

2.    On or by 19 September 2024, the solicitor for the respondents file and serve an affidavit of no more than 100 pages (including annexures and exhibits) deposing to the best estimate he can make of the quantum of costs that the respondents contend would be payable pursuant to the terms of the Costs Order (Costs Estimate) being an affidavit that includes sufficient detail so that the applicant’s solicitors can reasonably understand the basis of the estimate given, and allowing the applicant’s solicitors to form their own estimate of the likely costs payable pursuant to the terms of the Costs Order.

3.    Pursuant to s 37P(2) of the Federal Court of Australia Act 1976 (Cth):

(a)    the solicitors for the parties confer in person by 10 October 2024 in the offices of the solicitors for the respondents to attempt to resolve any outstanding queries the applicant’s solicitors may have about the Costs Estimate and to reduce the ambit of any dispute about the likely costs payable pursuant to the terms of the Costs Order; and

(b)    in the event the quantum of costs payable pursuant to the terms of the Costs Order is not agreed between the parties by 30 October 2024, the proceeding be listed for a case management hearing at 9:30am on 31 October 2024 for the Court to make orders for inquiry and report into the amount payable pursuant to the terms of the Costs Order (with the intention a reference take place as to relevant questions so as to arrive at the best estimate of likely costs by a referee that would be payable in the event the matter was proceed to a taxation and that, upon adoption of any report, the Costs Order be varied to provide for judgment for costs be entered in a fixed sum and to resolve the issue of any costs payable following the delivery of judgment at the initial trial, being costs that will not form part of the reference).

4.    Liberty to either party to apply to vary these orders or to seek orders requiring the provision of any information to allow an estimate to be made of the likely costs payable pursuant to the terms of the Costs Order.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    INTRODUCTION

1    In McNickle v Huntsman Chemical Company Australia Pty Ltd (Initial Trial) [2024] FCA 807 (J), I found that the applicant in this class action, Mr McNickle, had not discharged his legal onus of proving, on the evidence adduced in the initial trial, that the use of and/or exposure to Roundup can increase an individual’s risk of developing non-Hodgkin lymphoma (NHL) or cause an individual to develop NHL.

2    In the light of that conclusion and the dismissal of the claims made in the class action, I made a number of observations (at J [1177]–[1201]) as to the costs of this proceeding, and specifically invited submissions from the parties in relation to three issues:

(1)    the parties’ conduct and the overarching purpose;

(2)    the public interest dimension of this litigation and the discretion as to costs; and

(3)    the position of Mr McNickle.

3    I will return to these issues below, but it is worthwhile making some introductory remarks about the nature of class actions and costs in this context.

B    PT IVA AND PRACTICE AND PROCEDURE “PRINCIPLES”

4    There has been a tendency throughout the history of Pt IVA of the Federal Court of Australia Act 1976 (Cth) (FCA Act) for practitioners to make automatic reference to established practice and procedure principles in ordinary inter partes litigation without any adaption to those principles informed by the different nature of class actions.

5    This case is a good example.

6    As I have already explained, early in the litigation, I entreated the parties to bifurcate the issue of causation arising from the statutory claims (that is, whether Roundup is carcinogenic) from Mr McNickle’s claim in negligence, so that the causation issue could be heard and determined in advance of the balance of the issues in the proceeding. Although the separate issue was eventually confined to the factual question of whether Roundup can cause NHL (as opposed to cancer generally), it is convenient here to refer to this general factual causation issue as the central issue.

7    Mr McNickle forcefully opposed this course and referred to several principles in the authorities concerning the need for caution in making orders splitting issues for determination (see, for example, T9–11 (10 May 2021)).

8    Those principles urging a court to tread warily in determining separate issues are very well established but are of less force in the context of Pt IVA proceedings, which, if experience is any guide, almost always involve a staged hearing between common issues (or issues of commonality) and individual issues. As I said at that case management hearing (T11.25–36 (10 May 2021)):

HIS HONOUR: … I was raising an issue when you referred to the statements of a number of courts which are referred to heavily in your submissions about the fact that bifurcation of issues can often seem to be illusory and the cautions in that regard. The one thing I would say in relation to those cautions which are commonly stressed when that point is made is that they’re all made in the context of inter partes litigation. This isn’t inter partes litigation. By the very structure of Pt IVA there is always a bifurcation of issues and although it’s not necessarily in respect of an individual’s claim. Because what one is dealing with is not any one person’s claim but also the group member’s claim. So it seems to me those concerns have a little less impact or force in the context of class actions …

9    Put another way, the system already has built into it the bifurcation of issues.

10    Another example of practice and procedure principles being relied upon commonly in submissions without detailed consideration being given to the different nature of class actions are principles relating to costs.

11    As is well known, the class action regime introduced in March 1992 by Pt IVA of the FCA Act is partly, but not wholly, based on the seminal report of the Australian Law Reform Commission (ALRC), Grouped Proceedings in the Federal Court (Report No 46, 1988) (ALRC Report). In that report (at 126–127 [308]–[309]), the ALRC recommended the establishment of a “special fund” that would help lead applicants meet the significant costs burden of group proceedings, including in relation to adverse costs orders.

12    Although the special fund proposed by the ALRC never came to pass, the concern which motivated the ALRC to propose a special fund came to be ameliorated by the subsequent development of litigation funding in this country and the increased availability of after-the-event (ATE) insurance which had the effect of providing some security for an applicant in fulfilling the role of representing group members.

13    The reality, however, is that litigation funders expose themselves to risk in exchange for the expectation that they will receive a financial return upon the conclusion of the proceedings, through either settlement or judgment, supposedly commensurate with the perceived commercial value of undertaking that risk. Apart from incurring the sunk costs of conducting the joint enterprise, the greatest risk is that of an adverse costs order being made against the lead applicant.

14    At the risk of stating the obvious, as a general proposition, funding will only be available if the potential reward to the funder is at least commensurate with the ex ante assessment of risk by the funder. For anyone with a detailed understanding of the litigation funding market as it has developed in Australia, this means funding is often unavailable for a range of cases where the amount likely to be recovered may be highly significant for group members, but, in the aggregate, is relatively modest. By relatively modest, and depending upon anticipated costs, this may mean $30 million or even more.

15    I will return to these issues shortly, but it is worthwhile stepping back to say something more about the changes wrought by the introduction of Pt IVA.

16    The principal objective of the class actions regime as introduced by Pt IVA was to provide a mechanism by which non-party group members are bound to the litigation. As I explained in Perera v GetSwift Limited [2018] FCA 732; (2018) 263 FCR 1 (at 12–13 [20]–[21]):

[21]     … The original design [of Pt IVA], as noted in the ALRC Report at [92], was identified as follows:

The main objective of [the class action regime]…is to secure a single decision on issues common to all and to reduce the cost of determining all related issues arising from the wrongdoing. To achieve maximum economy in the use of resources and to reduce the cost of proceedings, everyone with related claims should be involved in the proceedings and should be bound by the result. (Emphasis added)

[22]     Consistently with this, in describing the general objectives of the Bill which inserted Part IVA in the Act, the then Attorney-General stated that it would:

provide a new representative action procedure in the Federal Court. The new procedure will enhance access to justice, reduce the costs of proceedings and promote efficiency in the use of court resources…The Bill gives the Federal Court an efficient and effective procedure to deal with multiple claims. Such a procedure is needed for two purposes. The first is to provide a real remedy where, although many people are affected and the total amount at issue is significant, each person’s loss is small and not economically viable to recover in individual actions. It will thus give access to the courts to those in the community who have been effectively denied justice because of the high cost of taking action. The second purpose of the Bill is to deal efficiently with the situation where the damages sought by each claimant are large enough to justify individual actions and a large number of person wish to sue the respondent. The new procedure will mean that groups of person, whether they are shareholders or investors, or people pursuing consumer claims, will be able to obtain redress and do so more cheaply and efficiently than would be the case with individual actions. (Second Reading Speech by Attorney-General, House of Representatives, 14 November 1991, Hansard, at pp 3174–3175)

17    It cannot be gainsaid that the fact that a single class action is capable of quelling controversies between vast numbers of individuals and a respondent demonstrates, in and of itself, an important public dimension to Pt IVA proceedings.

18    Contemporaneous with the development of class actions over the last few decades have been three other significant developments in modern litigation, including, as the Full Court recently noted in Storry v Parkyn (Vexatious Proceedings Order) [2024] FCAFC 100 (at [4] per Lee, Feutrill and Jackman JJ):

first, the increased demand on judges occasioned by the complexity and size of cases; secondly, the size and scale of the evidentiary material often placed before courts; and thirdly, the reality that courts are an arm of government dependent upon public resources at a time of increased focus on the efficient allocation of those resources.

19    As I explained in Kadam v MiiResorts Group 1 Pty Ltd (No 4) [2017] FCA 1139; (2017) 252 FCR 298 (at 300 [2]), the response to these three related developments in litigation generally has caused what might be described as a revolution in case management. Over the last 20 years, almost every Australian jurisdiction has introduced a provision by either legislation or by way of Rules of Court, setting out the “overriding” or “overarching” purpose of procedural rules: see FCA Act, Pt VB; Civil Procedure Act 2005 (NSW), ss 56–58; Supreme Court Civil Rules 2006 (SA), r 3; Court Procedure Act 2004 (ACT), s 5A (formerly Court Procedures Rules 2006 (ACT), r 21); Uniform Civil Procedure Rules 1999 (Qld), r 5; Civil Procedure Act 2010 (Vic), ss 7–8; Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 1.14; Supreme Court Rules (NT), r 1.10.

20    The case management revolution sought to be introduced by these statutes will fail to achieve their end in the context of class actions unless proactive steps are taken by way of case management to ensure that issues are identified early, and an efficient and cost-effective mechanism is put in place to deal with them. In this regard, the Court relies heavily on experienced class action practitioners who regularly appear in such proceedings to give early attention to such matters.

21    It is only by such active steps that the huge costs of such cases can be brought under some control. If proactive steps are taken to minimise costs, then the Court will be better able to provide access to justice to those persons who might otherwise be unable to take advantage of the system because litigation funding or ATE insurance is unavailable.

C    FACILIATING CLASS ACTIONS AND RISK TO THE APPLICANT

22    The benefits of class actions are only available if a person is willing to be a lead applicant. This necessarily involves a degree of work for the benefit of others but also involves an exposure to risk.

23    I have already mentioned the emergence of a market of third-party funding and insurance to ameliorate risk, but there are, of course, alternate ways a lead applicant may be protected other than through the involvement of a third-party funder or an insurer (or in combination with these strangers to the litigation). These modes of protection will generally involve a firm of solicitors providing an undertaking or an indemnity to the lead applicant which has the effect of “covering” any adverse costs order.

24    The first is a common method, at present, of seeking a “group costs order” in proceedings commenced in the Supreme Court of Victoria; a condition of which is that the “law practice” representing the plaintiff and the group members must give any security for the costs of the defendant in the proceeding that the Court may order the plaintiff to give: see s 33ZDA of the Supreme Court Act 1986 (Vic).

25    The second way, in the light of the Full Court’s recent decision in R&B Investments Pty Ltd (Trustee) v Blue Sky (Reserved Question) [2024] FCAFC 89, may be seeking upon settlement or judgment a “solicitors’ common fund order”, being an order providing for the distribution of funds or other property to a solicitor otherwise than as payment for costs and disbursements incurred in relation to the conduct of a class action (Solicitors’ CFO). Of course, one can never be prescriptive about matters, but it is difficult to conceive of circumstances where it would be appropriate for a Solicitors’ CFO to be made where any risk associated with the litigation to the applicant is not borne by the solicitors.

26    The third is the traditional, time-honoured approach of solicitors conducting work on a speculative, “no-win, no fee” basis, which has been the hallmark of common law litigation in this country for generations.

27    This proceeding was commenced on this third basis, and was accompanied by an undertaking given to Mr McNickle by his solicitors, Maurice Blackburn, whereby in the event of the Court making an order requiring Mr McNickle to pay some or all of the respondents’ (collectively, Monsanto) costs, Maurice Blackburn will pay to Mr McNickle an amount equal to the aggregate costs and disbursements (including GST) that Mr McNickle is required to pay, in accordance with that costs order, on the date that he is required to pay such costs and disbursements.

28    Against this background, I come to the exercise of the discretion as to costs following the failure of this class action.

D    THE DISCRETION AS TO COSTS GENERALLY AND THREE MATTERS

29    As noted earlier, I sought assistance from the parties in relation to three matters which seemed to me to be of relevance to the exercise of the discretion which had not been the subject of submissions, namely: first, the conduct of the parties and the overarching purpose; secondly, the public nature of the litigation; and thirdly, the position of Mr McNickle.

30    I will deal with each of these matters in turn, but at the risk of repeating matters that may be regarded as trite, I should emphasise some other matters highly relevant to the exercise of discretion.

31    First, the Court or a Judge has the power to award costs in all proceedings before the Court and that award is at the discretion of the Court: s 43 of the FCA Act.

32    Secondly, the power to award costs must be exercised judicially by reference only to considerations relevant to its exercise and upon facts in connexion with or leading up to the litigation. The formulation of principles to guide the exercise of the discretion as to costs avoids arbitrariness and provides consistency that is an essential aspect of the exercise of judicial power: Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 (at 172–173 [24] per Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).

33    Thirdly, as the High Court further noted in Northern Territory v Sangare (at 173 [25]), a guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party. Their Honours went on to observe (at 174 [27]):

[i]n point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation. The statutory power to order costs affords the successful party necessary protection against unmeritorious litigation.

34    At first glance, one might be forgiven for thinking that s 43 of the FCA Act provides for an “unfettered” discretion but in truth, the discretion is to be exercised by a Court having regard to the consideration of basic justice to the successful party emphasised by the High Court and other relevant considerations including, in this Court, recognising a costs order is a practice and procedure discretion which involves consideration being paid to facilitating the overarching purpose in Pt VB of the FCA Act.

35    But having said this, if one reviews the expression of principle in the cases, there is some merit is the observations of Petrovski, Li, Morabito and Nichol in their article “Public Interest Costs Orders in Federal Class Actions: Time for a New Approach” (2022) 45(2) Melbourne University Law Review 651 (Petrovski et al) (at 661) that:

Judicial descriptions of [s 43(1) of the FCA Act], and similar provisions, by Australian and English superior courts, have drawn attention to the ‘general statutory discretion which has not been constrained – even by prescription of relevant considerations or criteria’ — and the ‘absolute and unfettered’, ‘unlimited’, ‘unconfined’, ‘uncontrolled’, ‘unqualified’ and ‘untrammelled’ discretion that has been conferred on courts to award or not award costs. Yet, s 43 and similar provisions have been largely construed by courts as if they read as follows:

[I]n the absence of special circumstances … [t]his discretion … ought not to [be] exercise[d] … against the successful party except for some reason connected with the case.

    (Citations omitted)

36    I will return to a number of important points made in this article below.

D.1    The Parties’ Conduct and the Overarching Purpose

37    There was no dispute before me as to the relevance of facilitating the overarching purpose to the principled exercise of the costs discretion. The dispute was as to the weight of this consideration and, more specifically, as to whether there was any relevant conduct of Monsanto which engaged any concern as to the facilitation of the overarching purpose.

38    In its submissions on costs, Monsanto contends (at RS [17]) that a “considered and chronological review of the relevant procedural trajectory of this proceeding does not reveal anything in the respondents’ conduct that would justify a departure from orthodox principle that costs follow the event”.

39    The relevant procedural chronology is canvassed in part in the initial trial judgment (at J [1185]–[1193]), but it is necessary here to descend into further detail.

40    Monsanto submits that on 1 May 2020, at the first case management hearing, it advocated for a “separate and early determination of the central issue” (T27.7–8). It referred to observations made by the Court not only at that case management hearing, but on 23 March 2021 (to which I will return shortly), where I observed that (T5.15–17; T6.15–16):

HIS HONOUR: … the real question is whether these two products were carcinogenic, and whether any of the other positive defences which are pleaded to the statutory claims are made out … [I]f you fail on that, I just cannot see how you can win in … [other] aspects of your case …

41    I was not taken to the detail of the transcript during submissions, but a close review of the transcript reveals a slightly different and more nuanced picture than was painted in submissions.

42    It is true that during the first case management hearing, Monsanto focussed attention on the central issue and submitted that “if your Honour determines that Roundup did not carry with it the so-called cancer risk, that would be it” (T27.7–8). But it is important to recognise that was said in the context of an extant debate as to how the resolution of the central issue in this proceeding would affect similar and related proceedings, namely whether one or more of those proceedings should be the subject of a stay or declassing order. As the transcript reveals (T27.1–8):

MR CRAIG: … And, your Honour, that’s why we say you would stay a second proceeding … because the determination of the first proceeding will have a material bearing on the second.

HIS HONOUR: Yes.

MR CRAIG: So, for example, if your Honour determines that Roundup did not carry with it the so-called cancer risk, that would be it.

43    Between that case management hearing and 28 September 2020, when, at the parties’ urging, I made an order that the proceeding be listed for an initial trial of the whole of Mr McNickle’s claim and the sample group members together with common questions and questions of commonality to commence in March 2022 (Order 43) (as varied by Order 7 of the Orders dated 12 October 2020) (initial trial order), the issue of bifurcation remained dormant – that is until a “roundtable” discovery conference I convened on 22 March 2021 (conference).

44    At that conference, I raised with the parties whether it would be appropriate to determine the central issue prior to the negligence case. As I noted then (T109.4–9):

HIS HONOUR: … why isn’t it at least possible to explore the issue of determining the statutory cause of action separately before the negligence cases? Because if you win in relation to that, well, you don’t need a negligence case. If you lose in relation to that, then it’s, I would have thought, unlikely you’re going to win in a negligence case. But it’s a matter for you if you want to run it.

45    At that conference, I required those responsible for supervising the discovery task to be present.

46    For context, it is important to recognise that the issue of the carcinogenicity of Roundup products was not, in any way, new. Oral and documentary discovery in product liability litigation in the United States had presumably occurred because cases had already proceeded to jury trials. As I expressed it at the time, even leaving aside any depositions, those acting for plaintiffs in the United States would no doubt have compiled “greatest hits” compilations of documents to explain the case to a jury. Despite the applicant’s enthusiasm for very broad discovery on a whole range of topics extraneous to the central issue, I repeatedly indicated to the parties my desire to control the costs of discovery and redressing any important information asymmetry efficiently.

47    Indeed, I made several orders to redress the issue of information asymmetry in a costs-effective way, which were the subject of a series of defaults by Monsanto discussed at the interlocutory hearing held on 22 September 2020 (see, for example, T7–8). In the end, at around the time the initial trial order was made, a form of order providing for standard discovery in accordance with r 20.14 of the Federal Court Rules 2011 (Cth) (T28–29), was made (see Orders 3–5 of the Orders dated 28 September 2020).

48    Conscious of this context, at the discovery conference, I was staggered to hear about the scope of the discovery task being undertaken (which can only have been described as gargantuan) and inferred that the costs of this litigation were spiralling out of control; particularly in circumstances where many of the documents being discovered were unlikely to be relevant to the disposition of the central issue.

49    Accordingly, after again entreating the parties at the conference to consider the issue of bifurcation overnight, I conducted a case management hearing on the following day, 23 March 2021. At that hearing, the Court, by its own motion, proposed that the trial be bifurcated so that the statutory claims giving rise to the central issue be heard and determined in advance of the negligence claim. As I said at the case management hearing (T6.36–46 (23 March 2021)):

HIS HONOUR: … What’s happening is 5.5 million documents have been uploaded from 80-odd custodians. There are people sitting in offices in Melbourne, sitting in offices in Belfast working 24 hours a day spending vast amounts of money on a discovery process, which at the end of the day I’m far from convinced is necessary for me to justly determine these issues, and that troubles me because it does not seem to me – it might be great for people charging a huge amount of money in relation to either making discovery or reviewing documents, but if people have a focus on the overarching purpose, why wouldn’t it be appropriate to work out at the end of the day the binary scientific question of whether or not these products – these two products are carcinogenic or not?

50    Monsanto eventually embraced the course proposed by the Court (T10.10–30) and, by Order 9 of the Orders dated 23 March 2021, I invited the parties to provide any submissions as to whether the initial trial order should be varied to provide that the initial trial be a hearing as to: (a) Mr McNickle’s entitlement to a declaration in terms of prayer 1(a) and (b) of the amended originating application; and (b) the common questions identified in the second further amended statement of claim (at [65]–[68]).

51    That is, those submissions were to be directed to the question of whether Roundup Products (as defined in the orders) had a defect within the meaning of the Trade Practices Act 1974 (Cth) (TPA) and/or a safety defect within the meaning of the Australian Consumer Law (as contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)) (ACL), or were not of merchantable quality within the meaning of the TPA and/or were not of acceptable quality within the meaning of the ACL.

52    That was seen, at that time, as the appropriate mechanism by which the central issue could be resolved. On 9 April 2021, Mr McNickle filed submissions opposing the bifurcation of the trial, relying on the principles referred to above (at [7]). The approach of Monsanto, on the other hand, was to confirm the position it adopted on 23 March 2021 that an order should be made confining the initial trial to the statutory claims. Having regard to the whole of the material before the Court, it was only at this time that Monsanto belatedly fastened upon the appropriate approach, in accordance with the overarching purpose, of identifying the central issue which, as it turned out, proved to be the determinative issue in the proceeding.

53    On 10 May 2021, these submissions were the subject of a case management hearing where I pressed again the issue of bifurcation (T11.43–12.10):

HIS HONOUR: … If there was to be a safety defect, merchantable quality, initial determination, as I said, I would have been happy to hear that in October or November [2022] and I said I would get the judgment out to the parties in February, so you could have any second trial or remediation in March.

Now, the timetable that has been proposed is a much more leisurely one and I said I wouldn’t impose that over the wishes of the applicant, but I don’t think there’s much in the delay point and it wouldn’t delay it because if you – if the applicant was unsuccessful in respect of the safety defect and the merchantable quality point, it would resolve – it’s difficult to see how it would be successful in the other part of the case, which means that it would be resolved quicker than otherwise would be the case. I mean, it’s premised, the issue of delay and the fact that the applicant is successful.

54    Notwithstanding my concerns as to the enormous discovery task being undertaken and in the light of Mr McNickle’s consistent opposition to a separate trial, the initial trial remained listed as a trial of the whole of the applicant’s claims (see Orders dated 10 May 2021). On 11 February 2022, the commencement of the initial trial was adjourned to September 2023 on the basis that Mr McNickle’s nominated expert in epidemiology, Professor Armstrong, informed Maurice Blackburn that he could no longer give evidence at the initial trial: see McNickle v Huntsman Chemical Company Australia Pty Ltd (Hearing Vacation) [2022] FCA 133.

55    At the case management hearing held on 9 December 2022, I pressed the issue again, noting (T20.45–21.36):

HIS HONOUR: … I keep on coming back to this. But when it comes to the safety defect case, if it’s carcinogenic, there’s going to be a defect. If it’s not carcinogenic, there’s not going to be a defect … Again, in the negligence case it only is relevant, it seems to me, if you prove it’s carcinogenic. But that there’s an argument that the state of scientific knowledge was such that they could not have been reasonably aware of the fact at earlier times because of the state.

HIS HONOUR: It’s a tail wagging a huge German shepherd in that it’s such a minor part of the case and there’s all this – anyway. The whole case comes down to whether or not this thing is carcinogenic. And I just want to entreat you again to think about ways that we could make this trial simpler.

MS SZYDZIK: We will do so.

HIS HONOUR: Yes. I know I was talked out of having a separate question about whether or not it’s carcinogenic. I can’t quite understand how I was talked out of that, but I was. … I decided it was a good idea after hearing submissions, but not I’ve seen the expert reports and I still can’t understand why that’s not a preferable course.

MS SZYDZIK: We maintain that it isn’t, but perhaps we don’t really want to re- enliven that.

HIS HONOUR: Well, either it’s me or somebody else that’s going to have to sit down at a trial in separate next year and decide whether or not this is – you win or you lose. And that’s going to turn on the question of carcinogenicity, it seems to me.

56    It was not, however, until the case management hearing on 26 April 2024 that the parties agreed upon a set of proposed orders providing for an initial trial on general causation and, on that date, I made an order pursuant to ss 33ZF and 37P(2) of the FCA Act and FCR 30.01 that the proceeding be listed for an initial trial on the common questions identified in the annexure to those orders.

57    Subject to the above, I repeat my remarks in the initial trial judgment (at J [1185]–[1193]). It is difficult to understand why it was necessary for the Court, rather than Monsanto, to advance the position that the trial should be bifurcated in the way in which it eventually was split. Indeed, it was open to Monsanto, by no later than the second case management hearing, to make an application that the central issue be heard and determined in advance of the balance of the issues in the proceeding.

58    Particularly in the light of the attitude taken by those acting for Mr McNickle, I hasten to add that this is not to suggest that Monsanto (or its legal representatives) was in “breach” of the overarching purpose obligations – but nonetheless, the approach of not pressing earlier for bifurcation of issues was suboptimal and did not best facilitate the overarching purpose.

59    The reality is that Monsanto was confronting an applicant who wished to have a fight on all issues, and when the central issue was again pressed by the Court, Monsanto eventually did respond and pressed an application.

60    But it should not have been all up to the Court. As Søren Kierkegaard famously observed: life can only be understood backwards, but it must be lived forwards. If I have one regret in relation to this case, it is not following my instincts early on to grasp the nettle and push, on my own motion, for the parties to fully argue whether the central issue should be heard and determined in advance of all other issues shortly after the first case management hearing, rather than leaving it to the parties.

D.2    Public Interest Litigation

61    Mr McNickle contends that there is a substantial public interest in the Court quelling the controversy as to whether Roundup is capable of causing NHL and, accordingly, the appropriate exercise of the discretion is that there should be no order as to costs.

62    I will return to Mr McNickle’s submissions below, but first, it is necessary to say something more about how public interest litigation may inform the Court’s discretion as to costs.

63    In Petrovski et al, the authors advocate for an addition to Pt IVA of the FCA Act, namely a modified version of the provision recommended by the Victorian Law Reform Commission (VLRC) in 2018. As the authors note (at 658):

The VLRC recommended the addition of a provision that specified that

in making an adverse costs order, or a security for costs order in [Victorian] class actions, the Court may take into account, among other factors:

(a)     the function of class actions in providing access to justice

(b)     whether the case is a ‘test’ case or involves a novel area of law

(c)     whether the class action involves a matter of public interest.

The VLRC explained that the rationale for this provision was to reduce the risk that lead plaintiffs in Victorian class actions that concern, among other things, a matter of public interest would be required to pay some of the costs of their opponents. The VLRC envisaged that this type of class action litigation may be seeking non-monetary relief, or monetary relief in an amount ‘that is too low to attract the financial support of a litigation funder or lawyer’. Thus, reducing the risk of an adverse costs award was intended to encourage more claimants to assume the daunting role of lead plaintiff and encourage third parties to support class actions that they would otherwise not have been willing to fund because of the risk of adverse costs.

(Citations omitted)

64    It is unclear to me why express statutory reform is necessary.

65    The fact that class actions facilitate access to justice and have an important public dimension are matters which, in appropriate cases, can already inform the broad discretion conferred by s 43 of the FCA Act. Petrovski et al make several points about the way in which the public dimension of class actions should be recognised as a matter informing the Court’s discretion as to costs. The authors refer, for example, to s 31(1) of Ontario’s Class Proceedings Act, SO 1992, c 6, which provides that:

the court may consider whether the [class] proceeding was a test case, raised a novel point of law or involved a matter of public interest.

66    The authors also canvass (at 683–688) a series of Canadian cases interpreting this provision, and refer to five cases in this country that have involved consideration of the public interest dimension of class actions in the context of costs orders, being: Woodlands v Permanent Trustee Co Ltd (1995) 58 FCR 139; Qantas Airways Ltd v Cameron (No 3) (1996) 68 FCR 387; DBE17 v Commonwealth of Australia (No 2) [2018] FCA 1793; (2018) 265 FCR 600; Turner v MyBudget Pty Limited (No 2) [2018] FCA 1509; and Cumaiyi v Northern Territory (No 2) [2020] FCA 1804. As the authors note (at 679–680):

The existence of just five judgments on the alleged public interest nature of pt IVA proceedings, in the context of the allocation of litigation costs over a period of almost 30 years, represents a disappointing result in absolute terms and also when compared with the overall use of this regime. For instance, available empirical data has revealed that 87 federal non-investor class actions were filed on behalf of vulnerable claimants in the first 22 years of the operation of the pt IVA regime. This constituted just over one in every three non-investor pt IVA proceedings filed during that period. Even more significant, for present purposes, is the fact that the vast majority of the class actions filed during this period on behalf of Indigenous persons, migrants and refugees were unsuccessful.

…

Do the facts that three out of the five lead plaintiff applications for public interest costs orders in pt IVA proceedings over the last 30 years were filed in the last three years, and that two of those were totally successful, mean that legislative intervention is not required? We do not believe that this is the case.

(Citations omitted)

67    Certainly, as explained above, it is necessary to avoid an approach which involves uncritically transposing some practice and procedure principles in ordinary inter partes litigation to the context of class actions. As noted earlier (at [16]–[17]), when one understands the nature and purpose of Pt IVA proceedings, it is self-evident that class actions have an important public dimension in facilitating access to justice and provide for a binding determination which transcend the interests of the parties to the litigation.

68    One of the cases referred to by Petrovski et al (at 675–676), being the decision of the Full Court in Qantas Airways v Cameron (No 3), is of interest because it did involve a lead applicant seeking damages and compensation both individually and on behalf of group members, being those who alleged that they suffered loss and damage as a result of being exposed to cigarette smoke onboard Qantas’ aeroplanes. By the time the matter came to the Full Court, there were only 10 group members, and damages had been awarded to just one group member equal to $200. An argument was advanced on behalf of the lead applicant that the litigation was in the public interest because its primary purpose was, in substance, “to establish the nature of the duty owed by Qantas in respect of environmental tobacco smoke on international flights” (at 389).

69    Two members of the Full Court (Lindgren and Lehane JJ, with Davies J not deciding) found that the relief sought by the lead applicant was “mixed” to the extent that the declaratory and injunctive relief was sought in the public interest but the same could not be said for the damages sought for the 10 class members. Their Honours observed (at 389C, 389B, D) that the public interest purpose and nature of a proceeding launched by an individual or individuals is “not necessarily irrelevant” to the issue of costs, and where such a party is unsuccessful, the legal costs of the proceedings normally payable to the successful litigant can be reduced if the litigation has “served the public purpose of elucidating the law”, even where the legal issue decided is quite different from what was pleaded by that party.

70    If one has regard to all three judgments of the Full Court (see Qantas Airways Ltd v Cameron (1996) 66 FCR 246; Qantas Airways Ltd v Cameron (No 2) (1996) 68 FCR 367), it is fair to say that that litigation was characterised as not being pursued purely in the public interest, but for a mixed private and public purpose. This is not uncommon. A major difference between class action litigation and what might be described as “pure public interest litigation” is that in class actions, most applicants have a pecuniary or other material interest in the litigation. But I respectfully agree with Petrovski et al that this difference should not lead to a general inability to characterise some class actions such as “public interest litigation” (to the extent that such a broad characterisation is useful).

71    As to the public interest nature of this litigation, Mr McNickle developed his submissions as follows:

3.     Where the bringing and determination of a class action is in the public interest, that is a factor that is relevant to the Court’s discretion in relation to costs and it may, depending on the nature and circumstances of the case, lead to an unsuccessful applicant not being ordered to pay a successful respondent’s costs: see Turner v MyBudget Pty Limited (No 2) [2018] FCA 1509 at [8]–[14] (and the cases cited therein) and DBE v Commonwealth of Australia (No.2) [2018] FCA 1793.

4.     Mr McNickle submits that there can be no doubt that there was a substantial public interest in the Court quelling the controversy of whether use of, or exposure to, the relevant Roundup products can increase an individual’s risk of developing NHL and or cause an individual to develop NHL. That is so because:

(a)    Roundup Herbicide and Roundup Biactive are herbicide products that have been available for sale in Australia since 1976 and 1996 respectively. Since those dates both of those products have been promoted and marketed in Australia and sold with labels and directions for use that did not refer to any possibility that the products may be carcinogenic: see paragraphs [23], [42] and [43] and [50] to [56] of the Agreed and Non-Controversial Background Facts document, which is Exhibit 2 (the ‘ANCBF’). Roundup Herbicide and Roundup Biactive are both products that are goods ordinarily acquired for personal, domestic or household use: see [50] of the ANCBF. They are also used in agricultural settings and hence they are registered with the Australian Pesticides and Veterinary Medicines Authority (the ‘APVMA’): see [20] to [27] of the ANCBF (CRT.KMN.002.0001).

(b)    The science, and expert opinion, on the central issue of whether use of, or exposure to, the relevant Roundup products can increase an individual’s risk of developing NHL and or cause an individual to develop NHL, is not all one way, as acknowledged by the Court at [1164] of the Reasons for Judgment in the initial trial (‘the initial trial Reasons’). Hence it is clear that the Mr McNickle had a reasonably arguable case on the central issue of general causation. That was also clear from the joint reports prepared by the experts who participated in the expert witness conclaves in this case.

(c)    Different public bodies have come to different conclusions in relation to whether GBFs are carcinogenic and that matter can be reasonably expected to lead consumers in Australia to be concerned and uncertain about whether using GBFs, such as the Roundup products, could cause them to develop NHL and or other cancers – for example, compare:

(i)     the conclusion of IARC, in 2015, that “Glyphosate is probably carcinogenic to humans” as set out on page 398 of IARC Monograph volume 112, (KMN.001.001.1850); with

(ii)    the conclusion of the APVMA in 2017 that “the scientific weight-of- evidence indicates that …exposure to glyphosate does not pose a carcinogenic or genotoxic risk to humans”: see page 9 of the APVMA’s “Final regulatory position: Consideration of the evidence for a formal reconsideration of glyphosate” (MAL.001.049.1647).

(d)     Aligned to paragraph 4(c) above, the emphasis placed by the respondents on regulatory approvals in Australia and elsewhere (which were a large feature of Conclave H) and the reliability and robustness of approval processes designed to assess pesticides and potential carcinogens were axiomatically matters of great public interest given the ubiquitousness of the Roundup products.

5.     Mr McNickle submits that in light of the longstanding availability of the Roundup products, the conflicting conclusions of IARC and the APVMA in relation to the issue of whether glyphosate is carcinogenic to humans, and questions about the robustness of regulatory approvals both in Australia and elsewhere, as well as the conflicting science and expert opinion on this issue, there was a substantial public interest in the bringing and determination of this proceeding as a vehicle to quell the controversy of whether the Roundup products are carcinogenic, which is a matter of substantial importance for consumer safety. Mr McNickle respectfully submits that this case, like Turner v MyBudget Pty Limited., is “a world away from a commercial class action”: see Turner v MyBudget Pty Limited. (No.2) at [10].

6.     Furthermore, Mr McNickle submits that it was necessary and desirable, and in the public interest, for the controversy of whether the Roundup products can cause NHL to be quelled by way of a trial in a superior Court, open to the public, in which the relevant experts gave oral evidence, and were subjected to cross examination, and the trial Judge received detailed submissions from the parties which, it is hoped, assisted the Court in coming to a decision in relation to this issue of public importance.

7.     For the foregoing reasons, Mr McNickle respectfully agrees with the statement of the Court at [1198] of the initial trial Reasons that “Given the significant public interest in this litigation, the resolution of the central issue … transcends the interests of the parties”.

8.     Mr McNickle also submits that this case is as an exemplar of one of the fundamental purposes of Part IVA of the Federal Court of Australia Act 1976 (Cth), which is to allow for the aggregation of a large number of important individual claims which would be financially untenable if brought by those individuals acting alone, because their individual value would be dwarfed by the resources required to prosecute them.

9.     Relatedly, Mr McNickle further submits that an additional aspect of the public interest that has been served by this litigation is that because Mr McNickle has brought this proceeding on behalf of all of the group members, the costs (to the respondents, the court system and other court users) associated with determining at least hundreds of individual cases (if they could be feasibly prosecuted individually) have been avoided. As observed by the Court at [1200] of the initial trial Reasons, this case “has provided a means by which the evidence currently marshalled has been evaluated and assessed thus resolving the legal rights of a great many people”: [1200].

10.     The fact that Mr McNickle sought damages for harm that he alleged he suffered as a result of his use of Roundup products does not take this case out of the realm of public interest litigation: Turner v MyBudget Pty Limited (No 2) at [13]. That an award of damages was sought by Mr McNickle does not detract from the public interest in having a superior Court make findings in relation to whether the Roundup products can cause cancer and, had it been necessary to do so, determine the extent, if any, of the Respondents’ tortious and statutory liability for any injuries caused by those products.

72    Monsanto does not cavil with the proposition that this litigation has some public interest dimension, but notes that there is no general principle which could displace the application of the usual order as to costs in circumstances where the proceeding could be characterised as being in the public interest.

73    More specifically, Monsanto made six relevant points.

74    First, this litigation had a private dimension. The proceeding was brought for the benefit of group members seeking compensation for personal injury under statutory causes of action and damages at common law, including exemplary and aggravated damages, based on allegations against Monsanto and its commercial interests. It was not a proceeding, for example, challenging the position of the Australian regulator responsible for the registration of the relevant Roundup products.

75    Secondly, it is said that this is not a case like Turner v MyBudget where a striking feature of that litigation was that any compensation or damages that would have been recoverable would have been very modest, yet the collective benefit was potentially large (at [13]).

76    Thirdly, this was not a case where the applicant pursued the litigation to ensure that some legal principle, right or process affecting the environment or the broader public at large would be upheld, particularly in circumstances where, in the proceeding, Mr McNickle did not challenge the regulatory approval given by the Australian Pesticides and Veterinary Medicines Authority for glyphosate to be sold in this country.

77    Fourthly, it is said that the proceeding did not involve a novel issue of law, or the interpretation and future administration of provisions, affecting the public at large. Rather, it involved serious allegations of fact, levelled against Monsanto and its commercial interests, brought for the benefit of the applicant and group members, which has caused Monsanto to incur costs on what was ultimately an insufficient evidentiary basis.

78    Fifthly, the size of the case and gravity of the allegations against Monsanto stand in stark contrast to Turner v MyBudget, which involved a two-day hearing. Monsanto, on the other hand, has been put to the expense of defending serious allegations brought against it and its commercial interests.

79    Sixthly, Monsanto notes that its intention to seek a costs order was communicated consistently to the applicant.

80    These points each have some merit and although this case was focussed on obtaining either statutory compensation or damages for the lead applicant and the group members, in my view it did have a real public dimension in resolving an important controversy as to whether glyphosate and/or GBFs can cause NHL in humans. For this reason, the public interest dimension to this class action does constitute a relevant consideration in determining whether to award costs and whether, to adapt what was said by Lindgren and Lehane JJ in Qantas, whether the legal costs of the proceedings normally payable to the successful litigant can be reduced because this litigation has, at least in some measure, served the public purpose.

D.3    The Position of Mr McNickle

81    As noted above, an indemnity or undertaking has been provided to Mr McNickle by Maurice Blackburn.

82    It would have been a very unfortunate result for Mr McNickle to have been burdened with paying an adverse costs order in the light of the singular role he has played in this litigation and other matters referred to in the introduction to the initial trial judgment. Monsanto, being alive to this consideration, with respect sensibly and appropriately, indicated to the Court today that it is prepared to proffer an undertaking that any costs order made against Mr McNickle would not be enforced against him directly.

E    THE APPROPRIATE EXERCISE OF THE DISCRETION

83    I found this to be an unusually difficult application. It calls for an exercise of discretion where there is no uniquely correct result and different decision makers may reach a different result. My lodestar, as the judge who has seen the whole of this singularly complex case unfold, is to achieve a just costs outcome by paying regard to all relevant considerations the parties have identified and discarding irrelevant ones.

84    Although I do not consider that the inherent public dimension of class actions has received the emphasis that it deserves when dealing with issues as to costs, ultimately this was a case where the primary purpose of the litigation was for the applicant and the group members to obtain monetary relief, by way of ordinary common law damages, including aggravated and exemplary damages, and statutory compensation. Moreover, serious allegations were made against Monsanto which, in the end, were not pursued by experienced senior counsel at trial (although I have no doubt that those responsible for making these allegations did not conscientiously consider that they had a reasonable basis for making them when they were pleaded).

85    Further, I cannot leave this case without recognising that very significant and unnecessary costs were expended. Although I do not find this rose to the level of constituting any a breach of a statutory obligation to facilitate the overarching purpose by either party, the Court received less than optimal assistance from the parties in identifying, isolating and then pursuing the separate and speedy determination of the central issue early on in the litigation which, in the end, proved to be the determinative issue.

86    I do not put it higher than I have because the way in which this proceeding has been conducted on behalf of both parties, when focussed on the central issue, has been exemplary. The initial trial, which could have been unwieldy, was made manageable by reason of the high skill of all involved and a sensible attitude being taken to, among other things, questions of admissibility. These are not empty words. If all hard-fought commercial or regulatory litigation was conducted at trial like the way this trial was conducted, the role of judges in determining cases of this scope and complexity would be made far easier.

87    At the end of the day, notwithstanding s 43 of the FCA Act entitles the Court to take a broad-brush approach to the issue of costs, the weightiest consideration is that Monsanto has been brought to the Court to defend allegations made against it which were ultimately not sustained. Despite the relevance of the public interest dimension to this litigation explained above, this means that there must be some (and a very substantial) costs order made against Mr McNickle in favour of Monsanto.

88    I have considered all the submissions and material before me, including the relevant procedural history of the proceeding. I have specifically had regard to, and weighed carefully, the cardinal and most important consideration that it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate and moreover have had specific regard to the stout resistance of the applicant to narrowing issues and the more co-operative approach taken by the respondents when the narrowing of issues was raised by the Court.

89    I have also had some regard to the public dimension of this litigation. The weighing of all these relevant considerations is a matter upon which minds could legitimately differ but, doing the best I can to achieve an overall just result, and as someone who has seen the entirety of the proceedings unfold as I have closely case managed and then heard them, I consider Mr McNickle should pay Monsanto’s costs of the proceeding. But those costs ought to be limited to the party/party costs that would have been payable if an initial trial of the type that ultimately took place had been ordered at the time when Order 7 was made on 12 October 2020 (which then identified, subject to refinement, the proposed scope of the initial trial). By this stage, given what had occurred, it should have been not only apparent but obvious to all parties that the central issue was apt for separate determination and an application ought to have been made and pressed to facilitate this course.

90    This means costs incurred which are extraneous to the conduct of the initial trial, as ultimately conducted, after 12 October 2020, would not be within the scope of the adverse costs order.

91    I have informed the parties that I consider it is appropriate to quantify those costs quickly and inexpensively in a way which facilitates the overarching purpose. Further, as I indicated to the parties in the course of oral argument today, my intention is to direct that an affidavit be filed on behalf of Monsanto which sets out an estimate of the costs sought to be recovered pursuant to the terms of the order I have indicated, with sufficient detail in order to allow the solicitors for Mr McNickle to consider that affidavit, make their own estimate as to the likely costs payable, and make an offer to resolve the costs dispute within a certain period.

92    It seems to me, at least prima facie, that it would be consistent with the overarching purpose obligations for offers to be exchanged between the parties to resolve the costs liability. Time will tell whether some consensus can emerge prior to implementing a process to quantify the costs the subject of the order I have indicated. Needless to say, the approach to costs incurred after judgment and the ultimate procedural costs of any process of quantification (if it was required to be undertaken), are likely to be heavily influenced by the approach each party takes to the consensual resolution of the costs issue by the end of October.

F    CONCLUSION

93    I will make the orders consistent with these reasons in Chambers after receiving details of the proposed undertakings and any minute of order provided by the parties.

94    The process I have put in place to attempt to quantify the costs payable requires cooperation between solicitors but given the competence and skill of the practitioners involved, I am confident that such cooperation will take place. If a difficulty arises with timing, or the process contemplated by the orders, I will reserve liberty to apply.

Associate:

Dated: 8 August 2024